SoftBank’s Earnings Presentation Leaves Out Mention Of Activist Investor

SoftBank’s Earnings Presentation Leaves Out Mention Of Activist Investor
  • SoftBank showed a profit in the final quarter of 2019.
  • But during a presentation, Son made zero reference to activist investor Paul Singer.
  • Singer invested more than $2.5 billion in SoftBank and could signal a pending activist campaign.

Japan-based global conglomerate SoftBank reported this week a return to profit in its fourth quarter results and its chairman Masayoshi Son was more than happy to gloat about its performance during a presentation.

Absent from the presentation was any mention or discussion on the latest development at the company half the world away: a so-far tepid campaign by Paul Singer which may (or may not) blow up into an all-out activist campaign.

The Most Important Detail Left Out

According to Bloomberg Opinion columnist Tim Culpan, Son made no specific mention of Singer or his activist hedge fund Elliott Management. Whether it was Son’s intention or not, the billionaire American’s evasion from the spotlight became the “unintended key feature” of Son’s presentation.

Singer’s initial disclosure of his investment in SoftBank was good enough to drive up the Japanese stock by 8% which marks its best one-day performance in a year. If Singer was looking for any sort of acknowledgment of his investment, he had to wait until the final two minutes of Son’s presentation.

But even then, Son commented an “activist investor’s” involvement in the stock is merely confirmation that SoftBank’s stock trades at a discount to its book value.

Singer Mentioned By A Reporter

Singer finally received a name-drop, but only after the presentation came to an end. And even when it did, it came from a journalist attending the presentation who asked Son a question.

Son was careful not to use Singer’s name himself as well as avoiding discussions on Singer’s activist demands, such as implementing a large share buyback program and increasing corporate governance.

According to Culpan, Son didn’t even acknowledge the issues raised by Singer are valid in the first place. In fact, Son said in the Q&A session Softbank had already dabbled in share buybacks and he discussed adding more independent directors to its board before it was brought up by Singer.

Does Singer Have A Case To Make?

SoftBank investors who give Son the benefit of the doubt for discovering on his own the importance of improved management standards and oversight are being “naive,” Culpan wrote. In fact, the Japanese executive’s own words make this clear: he believes corporate governance is accomplished by not investing in companies showing problematic symptoms.

Culpan concluded: “So while people may have high hopes about the role Elliott could play in spurring SoftBank to change its ways, they ought to take note of the fact that Son barely utters the name.”

By Jayson Derrick
Jayson Derrick has been writing professionally about stocks since 2011. He is particularly interested in alternative investments, hedge funds, and activist investing. He is a big fan of NHL hockey and lives in Montreal, Canada with his wife and four year old daughter.
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